Business

Microloans boom in Colorado benefits refugees

Hussein Rahma, a refugee from Iraq, will soon open his second Middle Eastern restaurant — Alrafidain, in Aurora — with the help of a microloan. (RJ Sangosti, The Denver Post)

All Abdullahi Shongolo wanted in America was a college degree and a decent job.

He worked for years in grocery store warehouses, took night classes and got a job as a lab technician. A Somali refugee, he never dreamed of owning a business.

But three years ago, Shongolo, 30, bought New Discount Store, a convenience store and international food shop on Yosemite Street in Denver.

"If you try, this is America — you can," Shongolo said. "This is the country that went to the moon, man."

He bought the shop using money from a pair of local microlending nonprofits, groups that offer loans that commercial banks wouldn't. They lend money in sums smaller than banks do, and they regularly serve low-income clients.

Sisay Teklu, Executive Director of Community Enterprise Development Services in Denver, helps refugees start their own business, June 18, 2014. (RJ Sangosti, The Denver Post)

And in Colorado, business is booming.

As the economy has rebounded, more businesses have sought to expand, and they've been met with banks that are more strict about lending, said Justin Vause, senior lender at Accion New Mexico, a microlending group that expanded into Colorado five years ago.

Mix in growing awareness of microlending, a relatively young phenomenon in Colorado, and you have a recipe for explosive growth: Representatives of local microlending groups say they're approving far more loans than ever before.

Executive director Sisay Teklu says it's the only microlending agency in Colorado that targets immigrants and refugees like Shongolo.

None of the organization's 51 loans has defaulted, which Teklu thinks owes to the program's support services, help from borrowers' families and refugees' willingness to put in long hours. Shongolo said he works at his store 12 or 13 hours a day, seven days a week.

"If we fail from here, where are we going? We don't have anywhere to go," said Teklu. "It is a matter of survival."

Default rates at other organizations vary: Accion has an all-time rate of 5 percent; international lender Kiva's is 1.1 percent. About 15 percent of the federal Small Business Administration's microloan program's loans default.

The businesses the refugees run aren't flashy — mostly stores, restaurants and home day cares, among others — but they're significant, said Teklu, himself an Ethiopian refugee.

They help recent immigrants integrate into society, build credit and create jobs for others.

That means a lot for immigrants like Hussein Rahma, a 44-year-old who emigrated from Iraq with less than $50 and no English-language skills. Now, Rahma owns two Middle Eastern restaurants in Aurora, Tarboosh and Alrafidain, which opens next week. He says his 16-year-old daughter is excelling in school.

"All newcomers, refugees included, have some obstacles," said Joe Wismann-Horther, integration partnerships coordinator at the Colorado Refugee Services Program. "It's a long-term endeavor to get to financial stability and to get back to where they might have been."

The number of refugees coming to Colorado has rebounded after 9/11, rising to 2,199 in fiscal year 2013. That's the second-most in the last 30 years, according to state data.

And when they get here, they bring ambition, said Suleyman Abbgero, 34, who runs My Cafe, a coffee kiosk in Aurora's Town Center mall.

"Refugees do not only bring a few bags of clothes and a few belongings," said Abbgero, who hopes to open — and sell — more coffee shops. "They also bring a lot of ideas. If they are given the opportunity, they can do much more."

Not all kids who play baseball are uniformed with fancy script across their chests, traveling to $1,000 instructional camps and drilled how to properly hit the cut-off man. Some kids just play to play.